Butler manufacturer survived decades-long churn of skills, tech, economy
A tide of change
December 26, 2012 10:00 AM
Ben Brewster, a toolmaker from Butler, cuts a component for a stamping die within .00005 inch at Oberg Industries.
A closer look at a component being made for stamping dies at Oberg Industries.
By Len Boselovic Pittsburgh Post-Gazette
Oberg Industries faced the same competitive pressures confronting other manufacturers in 1983. Low-cost foreign competition was taking away business, and the industry struggled with technology transforming what was being manufactured and how it was made.
Some of the family-owned Buffalo Township tool and die shop's customers were switching to suppliers in China, South Korea and other low-cost countries or changing from metal to plastic, recalled Wes Elliott, senior vice president in charge of business and technology development.
"A lot of customers disappeared on us," said Mr. Elliott, who joined the company in 1969.
But there were also promising opportunities. Manic growth in Silicon Valley offered the prospect of providing tooling for electronics manufacturers. The computer boom meant the productivity of Oberg's engineers was no longer constrained by their slide rules and calculators.
A TIDE OF CHANGE
Fourth in a series on how our economy has transformed since bottoming out a generation ago.
Our regional economy barely resembles the one from 30 years ago. A full generation has passed since January 1983, when the southwestern Pennsylvania economy was at its nadir and unemployment was at its all-time peak.
Today: Local manufacturer learns to adapt and thrive
Thursday: What's the single biggest difference between the region's workforce today and our workforce from a generation ago? In a word: women.
Friday: In the 1980s, investing in technology didn't seem like a way to replace the region's lost jobs. Also, a Latrobe family practice sees a future in an old-fashioned medical care model even as the industry has changed.
Mr. Elliott recalled a mid-'70s vintage $250,000, 96-megabyte hard drive system that computerized design and manufacturing. As big as a washing machine, it had 13 memory disks -- the forerunners of floppy disks -- that measured a foot or more in diameter and were 10 inches high.
"We bought state of the art," he said with a sense of pride, adding that not many competitors back then offered technology that powerful.
Oberg's ability to adapt to changing markets and technology, and to remain focused on quality are the main reasons the company not only survived Pittsburgh's manufacturing recession, but is bigger and stronger three decades later.
In the mid-'80s, Oberg had about 250 employees and annual sales of $15 million to $20 million, company officials said. The company supplied tooling to make complex, precision parts, and its biggest customers made electric motors, transmission bearings, cameras and containers.
Today, tooling accounts for only a small portion of its annual sales of about $110 million. Oberg also stamps, grinds and machines precision parts for customers in the aerospace, medical equipment and energy industries.
The company was founded in 1948 by Donald Oberg, a former Allegheny Ludlum salesman. Mr. Oberg became a legend in Carbide Valley, the Alle-Kiski Valley region that is home to about two dozen other tool and die companies launched by entrepreneurs who cut their teeth at Oberg.
"Mr. Oberg was the culture of the company. He set the culture," executive vice president David Rugaber said.
Oberg, who died in 1992, was a stickler about quality, cleanliness and eliminating waste. He also believed in investing in technology and training employees, no matter how rotten business was.
"We continued to hire people and invest even though the world around us was shrinking," said Greg Chambers, who joined Oberg in 1984 and is the company's director of compliance.
Before manufacturing's decline, a blue-collar job was a sought-after ticket to the middle class, even if it meant getting dirty and doing repetitious work that did not require much thought. Moreover, cars and other products were maintained or repaired by do-it-yourselfers, cultivating skills that provided a ready pool of workers for Oberg.
"That guy or girl isn't a dime a dozen anymore," human resources director Lou Proviano said.
Nor are new hires asked to fill boring, low-skilled jobs. They operate sophisticated, expensive equipment in a plant that is clean enough to eat off the floor, Mr. Rugaber said.
Because most young students are not trained in manufacturing skills or encouraged to pursue careers in the field, Oberg cast a net beyond Carbide Valley in March when it wanted to find workers for about 70 jobs it expects to create over the next two years. The company placed newspaper and radio ads in Erie and York in Pennsylvania; Dayton, Ohio; Detroit; and other cities with a manufacturing base. It also relied on LinkedIn, Facebook and other social media to spread the word. Spokesman David Getty said 54 new jobs were created this year.
Mr. Rugaber said other challenges Oberg faces are keeping up with customers, reinvesting in the business and dealing with much shorter cycles for computer technology. That makes it harder to decide whether to buy the latest system or wait a few years until the next generation of technology comes out.
He said Oberg is keeping its eye on additive manufacturing, also know as 3-D printing. The technology has been touted as the harbinger of the next industrial revolution. It allows companies to make finished, complex parts without bending, molding, grinding and assembling components -- many of the things Oberg does for its customers.
While the technology has promise, "We need it to get better yet to be in the [tolerance] reaches that we are in," Mr. Rugaber said.
For Mr. Chambers, two of the biggest changes since the 1980s are that Oberg's competitors are no longer just the companies created by entrepreneurs who once worked at Oberg and that global competition requires employees to constantly improve the way they go about their work.
"In the '80s, it was us vs. the valley. Now, it's us vs. the rest of the world," he said.
"Every time we touch something, we have to learn something because the next time we do it, we'll have to do it faster and cheaper."